Ethical Issues Faced By The Adelphia Case - 1310 Words

Introduction Organizations that behave ethically are more apt to earn the trust of their customers, employees, and stockholders. Then there are companies that hide the true value of the company from possible investors, customers, employees, and the public at large showing a lack of ethically behavior. This does not all the time included just one company, but a group effort to hide, steal, and mislead everyone for personnel gains. Everyone that deals with any organization expects the upmost ethically behavior on all levels. Background As a publicly-traded corporation, Adelphia, Inc. was one of the largest providers of cable services in the United States. After the company went public, it was learned that the company had materially†¦show more content†¦For instance, the funds owed the company by the Rigas family went undisclosed in the statements, because the management at Adelphia deemed such disclosure as being â€Å"unnecessary† (Barlaup, Hanne, Stuart, 2009). Given that Adelphia was a publicly traded company, the purposeful non-disclosure caused potential investors to rely on financial records that were grossly misleading. The inevitable result was the investors continued to inject money into a company that had all the appearances of profitability and sustained growth, but that was, in reality, rapidly becoming insolvent. Moreover, lending institutions also relied on the â€Å"independently-audited† financial statements, and they were more than eager to loan the company money, given Adelphia’s presumed state of financial â€Å"profitability.† Personnel Gains The second ethical problem in this case relates to the Rigas family’s use of publicly-held corporate funds as a personal â€Å"piggy bank.† The Rigases used the company jet for personal reasons â€Å"without approval of the Board of Directors†, on one occasion flying to Africa for a safari (Markon Frank, 2002). On another, one of John Rigas’ sons used a corporate jet to pick up an actress friend of his (Grant, Young, Nuzum, 2004). The former CFO claimed that Adelphia’s funds were used by one of Rigas’ sons to buy a condominium, and to build a $13M golf course (Grant, Young, Nuzum,Show MoreRelatedEssay about Business Ethics and Kant1466 Words   |  6 PagesIntroduction The purpose of this paper is to discuss how Adelphia Communications’ leadership, particularly the Rigas family, violated the trust of the public and its investors through unethical and illegal business practices. First, a synopsis of the Adelphia scandal will be presented. Next, a brief overview of ethics and how they apply to maintaining good business and public trust will be discussed. 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